Oil prices drop ahead of the election in November. Production is at a high point in the US, but it seems to be weaker as a result of poorer economic data in the US. Price is currently testing a double bottom on the 1D timeframe around $67 per barrel.
- Frank

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One important metal to watch is gold as we get closer to Wednesday. As price nears $2,500, the market remains unsteady. This is because CPI could come in stagnant or lower which would likely cause weakness in the metal.

However, if we get signs of rising inflation, gold may be the best trade to the long side. Stagflation is an incredibly bearish signal for stocks and the dollar. This makes gold a good hedge against that kind of scenario. A higher CPI could result in retesting the highs while a lower CPI could bring gold down to the rising trend line on the 1D timeframe.

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Retail is now long NASDAQ, RUSSELL, USOIL. Mixed positions are NIKKEI, GOLD, USDJPY, and SPX500. The crowd seems to be either long or neutral on the US indices.

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COT data showed another week of buying for every currency. This will likely result in a lot of neutral readings on the EdgeFinder. The top sells this week were commodities. NIKKEI saw a slight dip and the yen was in the top three most bought.

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Looking at US inflation data right now, there has not been much movement for the past year. At least not to the degree in which we saw CPI drop in 2022 to early 2023. The likely outcome for Wednesday is a small move either direction in CPI. Anything higher than expectations, however, could bring back the stagflation issue.

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Gold up today with the stock market as we start off the day with no news for the USD. The metal is moving higher like inflation is going to be higher even though the forecasts are 0.2% lower than last month. The 2 year yield is down the same amount that gold is up of 0.30%. Today may be a continuation of yesterday since there is no news and all the anticipation revolves around tomorrow’s report.
-Frank

Gold Daily Chart:

With CPI & PPI data coming out tomorrow and Thursday, it's possible we may finally see price break this range we've been stuck in.

I am currently long, and have been in the trade for 10+ days.

If we can close above resistance, I will look to trail my stop into profit in VIP.

- Nick

The stock markets rebound in the US with the anticipation of a lower CPI of 2.6%, from 2.9%. It seems to be an aggressive expectation of a drop this month and if it happens, it could be a very bullish sign for stocks. This week’s CPI data could likely help us determine if we are going to get a dovish or hawkish cut this month. We need to watch all CPI metrics tomorrow for any hints of a stagnant inflation level or cooling prices.
-Frank

Something that not many people seem to be talking about is the reversion of the yield curve this month. This chart plots the 10 year bond yield against the 2 year. When inverted, the 2 year yields more than the 10 year. And when the yields revert, the 10 year yields more than the 2 year. This is considered the number 1 recession indicator. Although it has been nearly perfect in calling market crashes, it doesn’t mean that one is going to happen today or this week, etc. They usually occur within a few months after the curve reverts to normal levels. We saw a record number of days below the inversion line, so investors are speculating whether this is going to mean anything for a long time.
-Frank

NASDAQ
Tech stocks rise after CPI came in as expected which was a drop of 0.4% from last month. This is the hardest drop in inflation we have seen all year likely due to oil prices tumbling hard. Core CPI rose by 0.1% above expectations which could cause a muted reaction to the data. The index may look to test the higher trend line on the 1D timeframe eventually, but upside seems limited. -Frank

Gold
Gold is somewhat trapped inside a channel near the highs. The latest CPI rollout might not be very bullish for the metal, but it might also be not as bearish either. The rate cut is expected this month, mixed inflation data will probably keep gold price from moving higher until we get to FOMC.
- Frank

UJ seems to be rebounding off a double bottom on the 1D timeframe today, but lower inflation resulting in a stronger dollar remains in question. Depending on how this candle closes today could suggest whether or not the pair will retest resistance around 143.4s or if we touch the double bottom again.
- Frank

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The market's strange reaction to today's news has been very tricky to read. It looks like there is a broadening pattern here on the 1H timeframe suggesting yet another indecisive move from traders today. What seemed like a potential retest of Friday's lows turned into breaking $5,500 by mid day. The first swing lower was outbought on the trade up. Not sure what to expect for the rest of the day, but I think it's good to stay away from the indices today.
- Frank

[VIP Trade Example]

BOUGHT GOLD UPDATE (Entered 10+ days ago)
📈 Bought at: 2472.47 [Floating in profit!]
🚫 Stop: 2499.99 (Trailed into profit!)
🎯 Target: N/A

ANALYSIS
Patience is finally paying off on this one. With today's breakout close on the 4H chart, I am finally able to trail stops into profit just behind this 4H level of support.
Slowing economic data + expected rate cuts keep me bullish on gold until something changes.

🙏

- Nick

Although this trade took time to play out, we're finally starting to see a break on gold. The risk to reward on this one was too sweet to miss!

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